Mining makes mark on Alaska economy

The Alaska mining industry issued a report Jan. 21 that outlines in graphic detail the considerable and growing impact that mining activities are having on the state. Mining companies spent an estimated $1.25 billion in Alaska in 2007 on everything from drilling rigs to rents and royalties.

"Mining companies strengthen Alaska communities by employing Alaska residents from more than 100 Alaska communities and purchasing supplies and services from hundreds of Alaska companies," the report said.

A banner year for the industry, 2007 brought $3.4 billion worth of gold, silver, zinc, lead, other base metals, coal, rock, sand and gravel production to Alaska mines, including $1.1 billion in exports.

The Alaska Miners Association summarized mining's impact for the Alaska Legislature in a briefing on critical issues facing the industry. The report was prepared in consultation with the Juneau-based McDowell Group.

Hammering home the idea that mining is a critical component of Alaska's economy, the miners presented lawmakers with a list of requests, recommendations and reminders.

Miners want initiatives stopped

Topping the list of actions needed by the Legislature, the miners focused on what they called "mine shutdown initiatives."

"Defeat the so-called "clean water" initiatives that would shutdown existing metal mines and eliminate future mine development," they urged.

Sponsors of two of the anti-mining initiatives turned in booklets Jan. 14 ostensibly containing more than the required signatures for the proposals to go before Alaska voters in the November election.

Supporters say the initiatives are aimed primarily at blocking development of the proposed Pebble copper-gold-molybdenum mine in Southwest Alaska. But critics, including the Alaska Miners, warn that the proposals would be far more devastating, stopping all future major mine development in the state. The Alaska Division of Elections is currently verifying the signatures.

Mines are key employers, taxpayers

Last year, the industry employed 3,500 workers in various mining operations from Kotzebue to Ketchikan, paying a total of $340 million to primarily Alaskans across the state. Mine workers, including impressive numbers of Alaska Natives, took home average annual wages of $80,000 each to 100 far-flung Alaska communities, including remote villages in the Alaska Peninsula, Yukon-Kuskokwim Delta, Interior Alaska, Bristol Bay region and Southeast. Another 2,000 Alaska workers benefited indirectly from industry spending in many of the same communities.

The report noted that 56 percent of the 465 jobs at the Red Dog zinc-lead mine in Northwest Alaska are filled by NANA shareholders, while 90 percent of the 200 workers at the Donlin Creek Project are Calista shareholders. At the huge Kensington gold mine project near Juneau, more than half of the construction-phase work force was Native-affiliated employees from Goldbelt Inc., Klukwan Inc., and Kake Tribal Corp.

In addition to $209 million paid to state government agencies in royalties, rents, fees and taxes, mining companies shelled out $170 million in similar payments to Alaska Native corporations such as Calista Corp. and NANA Inc. and $14 million to communities such as Delta Junction, Bethel, Fairbanks and Juneau.

An estimated $175 million went to state government in royalties, rents, fees, and taxes, up 11 percent from 2006 and up more 250 percent since 2005. This included $85 million in mining license taxes, up 8 percent since 2006 and up more than 350 percent since 2005.

The report also noted that the mining industry paid $80 million in corporate income tax in 2007, the second-highest amount of any industry sector after oil and gas.

In addition, mining companies paid $15 million to the Alaska Railroad Corp. and $18 million to the Alaska Industrial Development and Export Authority. Another $1 million went to the Alaska Mental Health Trust for rents, royalty payments and construction material sales.